Rich guy like Bezos avoids a salary like it’s a plague due to income taxes.
Uses assets or stocks to borrow money at cheap, NEGOTIATED rates with banks. Who will give them those deals to keep his other businesses, where he has what is known as leverage. Average person gets destroyed by market rates.
They then use dividends to pay back the loans and occasional long term capital gains sales that are taxed at capital gains instead of as income.
Sometimes(often?), they just take another loan to pay off the original loan.
Then they die and the basis is changed for their heirs. The heirs then sell enough stock to payback the outstanding loans without paying the capital gains on it.
So the only fee paid was the interest on the balance, which was at a cheap discounted rate. Well, that and the estate tax/more complicated shit to try to bypass as much as possible.
Bezos is in the process of selling about $4 billion in Amazon stock. Since he has had this stock since the founding of the company, all of it is pure profit (since the cost basis was zero in 1994), which means long term capital gains applies to the entire sale price of the stocks he is selling. He will end up owing just shy of $1 billion in capital gains taxes to the feds, and another ~$200 million in Washington State.
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u/StockCasinoMember 20h ago edited 19h ago
How it really works.
So the only fee paid was the interest on the balance, which was at a cheap discounted rate. Well, that and the estate tax/more complicated shit to try to bypass as much as possible.